Fleming moves to stave off JRG Re buy, fight it out amid status quo

Fleming Insurance Holdings moved quickly to stave off court-ordered execution of a forsaken acquisition from James River, arguing to the court that the status-quo is the better quo while a fundamental court appeal proceeds. 

Bermuda-based James River took a quick victory in court on its demand that Fleming be forced to proceed on an agreed deal to buy JRG Reinsurance for $277 million, as agreed last November. A court made the order in short order. 

That court order sounds dubious to Fleming “because it granted a mandatory preliminary injunction that awarded James River the final relief it seeks and upends, rather than reserves, the status quo.”

“Absent a stay, Fleming will suffer irreparable harm because if it prevails in litigating the merits or if this Court finds in its favour on appeal, the transaction may be irreversible,” lawyers for Fleming argued to the court pending a broader appeal. 

The dispute between James River and Fleming went to litigation in the New York County Supreme Court last month.

In its initial order that the deal must go on, the court had sounded firm. Contract breaches alleged by Fleming were “contrived and contrary” to the clear terms of the purchase agreement, the judge had written.  

“There is no breach for Fleming to rely on to delay the closing,” the court ruled. “Based on the SPA, the court finds that the breaches Fleming asserts against JRGH are not breaches at all. Rather, in the absence of a breach by JRGH, Fleming is in breach.”

Fleming was given to April 16 to pony up the payment in return for the asset. 

James River agreed to sell the Bermuda-based casualty reinsurer after losing $152.8 million for the most recent quarter, and in January it dissolved its Bermuda-based subsidiary, Carolina Re.

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